On January 1, 2018, McMillan Corporation issued $100,000 par value, 5-year, zero-coupon bonds. The market rate of interest on the date of the bond issue was 6%. The company's fiscal year ends on December 31.

Required

a. Determine the issue price of the debt.

b. Prepare the amortization table for the bond issue assuming that McMillan uses the effective interest rate method of amortization.

c. Prepare the journal entries to record the bond issue, the amortization entry on December 31, 2018, and payment of the bonds at maturity. Assume that the company uses a premium or discount account if needed.